TMI Blog2006 (8) TMI 74X X X X Extracts X X X X X X X X Extracts X X X X ..... rand name of third parties, the assessee availed the benefit of Modvat/Cenvat credit and also paid normal duty of excise. Five show cause notices were issued to the assessee to recover the benefit of SSI Notification availed by the assessee during this period on the ground that the assessee was barred from availing the benefit of SSI notification and Modvat/Cenvat credit simultaneously. The Joint Commissioner demanded an amount of Rs. 74,99,779/- on adjudication of the five show cause notices issued to them. A penalty of Rs. 10 lakhs was imposed on them under Rule 25 of the Central Excise Rules. Interest under Section 11AB was also demanded. On appeal, against the above order, the Commissioner (Appeals) passed the impugned order upholding the order of the original authority except the penalty, which he vacated. Hence this appeal by the assessee. 2.The lower appellate authority confirmed the demand, against the assessee mainly on the ground that the assessee was not eligible for the benefit of SSI exemption owing to the following condition which existed in the Notifications No. 8/1999, 8/2000, 8/2001, 8/2002 and 8/2003 which the assessee had violated. "2. (iii) the manufacturer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er specified goods". In CCE v. Ramesh Food Products the Apex Court had observed as follows : "Exemption envisaged for the specified goods accrues to them through instrumentality of the manufacturer. The notification clearly demarcated the two categories of manufacturers. A clear cut distinction is explicit between a manufacturer availing Modvat credit under Rule 57A and another not opting for the Modvat Scheme. As is statutorily provided, input duty relief is given under the scheme to the manufacturers who opt to operate under the scheme by applying for it in the prescribed manner. Ultimately the manufacturers have the choice of choosing one of the two concessions, i.e. either the Modvat Scheme or Notification 175/86. Further, there is no one to one correlation between the inputs and final products under Modvat Scheme. It would therefore not be possible to allow the manufacturer to simultaneously avail Modvat for some products and avail full exemption for others under small-scale exemption scheme." 2.3Following the ratio of the above decision, the lower appellate authority upheld the decision of the original authority to deny SSI benefit to the assessee. 3.In the appeal again ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clearing the specified goods was barred. It was further argued that the Commissioner (Appeals) erroneously relied on the ratio of Ramesh Food Products case and the case law of Kamani Food Products v. CCE (supra) as these had dealt with options available under Notification No. 175/86 which was not the case of the appellant. 4.During hearing , the learned Counsel submitted that the appellant had not availed benefit of two options simultaneously. Citing Notifications No. 8/2003 and 9/2003 for illustration (Notifications 8/03 and 9/03 are used as representive of similar twin Notifications of 99 to 2002 also), the learned Counsel submitted that the appellant had availed benefit of SSI exemption without the Modvat benefit in terms of Notification No. 8/2003. The branded goods bearing brand name of others were excluded from the scheme of exemption under Notification No. 8/2003 and they were like any other goods cleared paying the normal effective duty. Those goods were eligible for the usual benefits as available to any other assessee. He stated that Notification No. 9/2003 which contained the exemption scheme for assessees availing Modvat credit also excluded the branded goods bearing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efully considered the rival submissions. The main issue to be decided in this case is whether the assessee's own goods cleared by the assessee in the respective years were eligible for full exemption/slab exemption in terms of the relevant Notifications. The sole objection raised by the lower authorities to deny the benefit to the assessee's own goods is that the benefit is not admissible if the manufacturer availed credit of duty paid on inputs used in the manufacture of specified goods cleared for exemption counted to determine Rs. One hundred lakhs as pes the Table to the Notification. The concerned clause common in all the relevant Notifications reads as follows : "The manufacturer shall not avail the credit of duty on inputs under Rule 3 or Rule 11 of the Cenvat Credit Rules, 2002 hereinafter referred to as the said Rules), paid on inputs used in the manufacture of the specified, goods cleared for home consumption, the aggregate value of the first clearances of which, as calculated in the manner specified in the said Table does not exceed rupees one hundred lakhs" S. No Value of clearances Rate of duty (1) (2) (3) 1. First ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and exemption under Notification 175/86 to the manufacturer and the manufacturer had to decide on one option. Once an option was made, there was no liberty to the assessee to avail benefits of both the options simultaneously. Therefore an SSI unit availing full exemption as per the Notification No. 175/86 in respect of certain specified goods could not also avail the Modvat benefit in respect of certain ocher specified goods. 8.1Notification No. 175/86, dated 1-3-86 extended concessional rate of duty on first clearances of specified goods of value of rupees seven and a half lakhs while availing Modvat credit on inputs or full exemption benefit for such goods without the benefit of Modvat credit. The Notification also provided lesser benefit for further clearances in excess of the above aggregate value under both the options for higher slabs/aggregate value of clearances. In computing the aggregate value of clearances for the purpose of exemption under both the options, the notification did not require that the goods bearing brand name of third parties should be excluded. The following explanation, inter alia, governed computation of the above aggregate value for the Notification ..... 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